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A sad follow-up

As a follow-up to my story about the San Francisco law firm of Heller Ehrman, it is now being reported that they will dissolve the firm later this week.  Employees will have 60 days of pay under the WARN Act.

Who Owns the Law?

Should a government who drafts, passes and enforces laws hold copyright to those laws?  Carl Malamud, a Sebastapol, CA resident says no.  The Press Democrat reports he is leading a fight to make sure that all types of government statutes, codes and other laws are available to anyone who wants them.   He is posting a copy of all of CA’s code on a website.  But the state of California claims copyright to those laws; it currently dictates how you can access and distribute them and how much it will cost you for print or digital copies.

California generates about $880,000 annually by selling its laws, according to the California Office of Administrative Law.  I am not sure how New Jersey considers the copyright on the laws, but the legislature’s website has a horrible look-up facility which generates small sections of code one page at a time.  No copyright is asserted on the bottom of each page.

I am sure this will end up in court at some point.  it will be interesting to see how it turns out.

In Whose Best Interests???

You hire a lawyer to represent your interests in various legal matters….divorces, lawsuits, contract negotiations, etc.  They are supposed to be working for you, right?

Check out this Wall Street Journal blog entry about the financial troubles of west coast law firm Heller Ehrman LLP.  The salient part is here:

So what has happened to Heller, which has long ranked as one of the top firms in San Francisco and one of the top litigation shops in the country? For starters, the firm had many huge litigation matters settle in rapid succession last year, including its representation of Ernst & Young in securities fraud suits against AOL and Cendant. About one-fourth of its litigation business settled last year–a huge blow given that litigation makes up about 60% of the firm’s revenue, according to a Heller attorney. And that revenue has been hard to make up in a soft litigation market.

So is it in the firm’s best interests not to settle cases for clients?  Would settling cases bring in more business as (new and current) clients realize the firm is working to resolve their problems AND save them money?

Most clients seem to forget that their attorney works for them, not the other way around.

Further, the trial is a dying breed. The percentage of cases filed that actually go to trial has been steadily dropping.  Perhaps law firms need to have a different business model to reflect the changing times.  Lawyers need to focus more on being “problem solvers” rather than litigators.

Mediation resolves problems.  That is its main purpose.  If you are looking to resolve a problem that you have (a divorce, family squabble, commercial dispute), feel free to contact me.

(With a hat tip to colleague Geoff Sharp.)

It’s the pants?

They’re back again.  One of my favorite blogging topics, the (former) judge and his $54 million pants lawsuit.  I’ve written before about Judge Roy Pearson’s lawsuit against a dry cleaner for losing a pair of pants.  As you will recall, he lost his pants, lawsuit (and was required to pay the legal costs of the cleaners) and then his job.  The dry cleaner also went out of business as a result of the suit.

Judge Pearson has appealed both his job dismissal as well as the decision of the court in the pants matter.  Now, a 3 judge panel has agreed to hear his appeal on the missing pants in a hearing next month.

Has this case ever been through mediation?  How a lost pair of pants turned into all of this is beyond me.  In many cases, what people are suing over isn’t the core dispute at hand.  Perhaps something else transpired which has now spiraled out of control?

Mediation couldn’t hurt.  I’ll make some time if the parties want me to get involved.  :-)

Costs of Discovery Leading to More Settlements

Yesterday, the American College of Trial Lawyers and the Institute for the Advancement of the American Legal released a report entitled “Interim Report on Problems Associated with Discovery”.  Discovery is the pre-trial process where each side engaged in litigation gives and receives information about the case.  This information can include written questions (interrogatories), production (transfer) of documents and other evidence, as well as deposing (interviewing under oath) various witnesses, experts and litigants.  The purpose of discovery is to allow each side to assess how good a case they have (or not) and is guided by rules of court and evidence.

Discovery can be costly and disruptive.  Imagine having to produce records for the other side (under subpoena and other rules of court) that might be extensive, hundreds of bankers boxes.  Or having to spend days away from work in a deposition.  So one can imagine that using this “cost” against the other side becomes a bit of leverage to be used.  The study bears that out.

Nearly 1500 highly experienced lawyers (on a remarkable 42% return rate) answered the survey.  Some of the findings:

  • The civil justice system is in serious need of repair; it takes too long and costs too much. Deserving cases are not brought because the cost of pursuing them fails a rational cost-benefit test, while meritless cases, especially smaller cases, are being settled rather than being tried because it costs too much to litigate them.
  • The discovery system is broken. Discovery costs far too much and has become an end in itself.  One respondent noted: “The discovery rules in particular are impractical in that they promote full discovery as a value above almost everything else.”
  • Electronic discovery (i.e. emails and other electronically stored datam which can be voluminous), in particular, needs a serious overhaul. It is described time and time again as a “morass.” Concerning electronic discovery, one respondent stated, “The new rules are a nightmare. The bigger the case, the more the abuse and the bigger the nightmare.”
  • Local Rules (rules that are used by a single court or vicinage) are described as “traps for the unwary” and many think they should either be abolished entirely or made uniform.
  • Nearly half of the respondents said that notice pleading (seeking judgment on the case without trial) has become a problem because extensive discovery is required to narrow the claims and defenses and 57 percent said that with notice pleading, motions to dismiss on the pleadings are not effective in limiting claims and narrowing litigation issues.
  • More than 76 percent said that answers to complaints likewise do not accomplish the goal of narrowing issues. This suggests that a further look at notice pleading may be in order.
  • Only 34 percent of the respondents thought that early discovery disclosure (rules intended to reduce discovery) reduces discovery and only 28 percent said that it lowered litigation costs.
  • Ninety-two percent said that the longer a case goes on, the more it costs (this seems like a silly question to ask…what did the other 8% think, it gets cheaper) and 85 percent thought that litigation in general and discovery in particular are too expensive.
  • Sixty-four percent said that the economic models of many law firms encourage more discovery than is necessary.
  • Expert witness fees are a significant cost factor driving litigants to settle, ranking just slightly behind trial costs and attorneys fees in that respect.
  • Forty-five percent believe that there is discovery abuse in almost every case (almost equal in amount between plaintiff and defense counsels)
  • The survey respondents especially like judges to require ADR (55 percent said it has been a positive development in managing cases) and more than half thought arbitration is less expensive and faster than civil litigation.
  • Fifty-three percent said that the cumulative effect of discovery-rule changes since 1976 has not reduced discovery abuse.
  • 87 percent agree that electronic discovery is too costly, and 76 percent agree that electronic discovery issues are not well understood by judges.
  • Nearly 86% of respondents say discovery sanctions are seldom imposed
  • Nearly 71% believe counsel use discovery as a tool to force settlement
  • 56% said that the time required to complete discovery is the primary cause of delay in the litigation process, and another 20% of respondents cited the primary cause of delay as attorney requests for extensions of time and continuances.
  • 87% said discovery is too expensive and 85% said litigation is also too expensive
  • Nearly 81% report that their firms turn away cases when it is not cost-effective to handle them
  • 83% of respondents believed that litigation costs drive cases to settle that should not settle on the merits
  • Over 94% believed trial costs are an important factor in driving cases to settle, and a nearly equal number believe the same about attorney fees
  • Nearly 73% of respondents report that one-fourth or fewer of their cases are processed through ADR.
  • Over 82% view cases settling without trial due to court-ordered ADR as a positive development.

Overall, the report is a pretty stinging indictment of the civil justice system.

One of the criticisms of mediation is that it is “cheap discovery”.  What is so wrong with finding out early on what the other side has?  Mediation serves a useful purpose in getting the issues on the table early and effectively.  I’ve held mediations where attorneys learn new things from their clients (that were critical to their case).  I’ve had others where attorneys can quickly see how poor a witness their client will make.  New information presented in the mediation can change valuations of a case.  I encourage informal information exchange between the parties prior to mediation.

Simply put, mediation is a major part of the cure for the ills of discovery and of civil justice.  If you’re interested in saving time and money on your dispute, litigation or divorce, please feel free to contact me to discuss things further.

Sometimes, it’s the Timing

There are many reasons why disputes do not settle, in mediation or outside of it.  Often, a party is just not ready — it’s the wrong time for them.  They need more information or they need more time to assimilate, absorb and assess information given to them.  What parties don’t often consider is that sometimes timing can ruin a proposed settlement.

A case in point is an annexation dispute in Indiana.  A number of homeowners in an unincoprorated area are fighting being annexed into Fishers.  As an incentive prior to a lawsuit being filed, the town offered a 3 year declining tax abatement to the affected residents, which was rejected at the time.  The judge ordered the case into mediation and prior to today’s initial session, one of the homeowners group’s leaders came out and said they would now be willing to accept an abatement deal.

“The tax abatement was offered last year as an inducement to avoid spending hundreds of thousands of dollars litigating this case,” said Fishers attorney Bryan H. Babb, who noted the town since has been forced to battle residents’ attempts at incorporation, a legislative campaign to kill annexation, and the lawsuit, which was filed in April after months of confrontations.  “I have no indication from my client now that, after having spent hundreds of thousands of dollars, they would be willing to even discuss tax abatement.”

Certainly lots of things can happen once the real talks begin.  But parties need to think about the possible outcomes of turning down a deal at the time it is proposed.

Mediation: Kinder and Gentler

A writer for the Long Beach (CA, my former home for 6 years) Post Sports wrote the following:

In one of the penultimate scenes from the film “Philadelphia”, Tom Hanks’ character waxes eloquently on the very real but somewhat infrequent joys of being a lawyer. His character states from the witness stand that “not very often, but sometimes, you get to be a part of justice being done.”

As an attorney, I can relate well to this concept of sporadic justice. Yet as rare as these moments have been in my legal life, even rarer still were there actual occurrences inside a courtroom. In fact, most of these moments occurred in the offices and conference rooms of professional mediators—individuals who remain neutral and attempt to reach dispute resolution through means other than legal opinions and court orders. During my tenure as a lawyer, I found the mediation process to be more effective and rewarding than the litigation process. It gave the litigating parties a sense that they were “having their day in court” without the drawbacks of actually being in court. Mediation often takes a fraction of the time that the court process does, is cheaper for the client and involves the actual parties to a far greater degree in the outcome than does the lawyer-dependent court process. Over the last ten years or so, most courts have now made it mandatory that parties mediate their cases before trial in an effort to reduce the amount of court time and tax dollars spent on litigating controversies that could otherwise be settled through less intrusive means.